WASHINGTON, May 18, 2016 /PRNewswire/ -- A federal judge in Washington, D.C. ruled today that Ramon and Higini Cierco, the controlling shareholders of Banco Privada d'Andorra (BPA) "obtained precisely the relief they sought" against FinCEN and the United States Treasury when FinCEN withdrew the Notice of Finding and Notice of Proposed Rulemaking. Accordingly, he declined to rule on whether FinCEN had acted contrary to law when it issued the notices in March of 2015, declaring that FinCEN's backing down gave the Ciercos the victory that they sought.
FinCEN withdrew its notices on February 19 of this year, one day after filing its final brief. As The Economist noted at the time, "Like politicians, financial regulators know that late on a Friday is a good time to slip out bad news. The Financial Crimes Enforcement Network (FinCEN), part of America's Treasury, chose February 19th to announce it had rescinded a devastating finding against a European bank suspected of facilitating money-laundering. The withdrawal, less than a year after the designation, looks like a climbdown."
"While FinCEN withdrew the notices, effectively vindicating the Ciercos, we are disappointed that the court did not demand full accountability from FinCEN and hold that FinCEN acted illegally when it took the actions in March 2015 that was designed to threaten the Andorran financial system by singling out BPA for closure," said Eric Lewis of Lewis Baach lead lawyer for the Ciercos. "FinCEN knew that it 'used the hammer' against BPA to frighten Andorra, as a US Embassy official confirmed, and it was certainly effective," Lewis continued. "But the use of such draconian measures against a small bank that posed no security risks whatever, without any warning or due process, was against the law. FinCEN then tried to sweep its unlawful actions under the carpet by withdrawing the Notices because it knew that Andorra had knuckled under to its threats. We won, but we also wanted FinCEN held accountable for its conduct. Unfortunately, the judge declined to do that."
"We have now been confirmed in what we have said all along. BPA was not a bank of 'primary money laundering concern' and it should not have been closed," said Ramon Cierco, one of the controlling shareholders. "We wanted to call attention to the injustice done to us and to a pattern of conduct that has happened before and can happen again."
The Economist identified "two problems with FinCEN's money-laundering cudgel. The first is double-standards. It tends to go after only small banks in strategically unimportant countries; its use of 311 has been likened to using a sledgehammer to crack nuts. The second is its lack of openness. It faces no requirement to make detailed evidence public, or even available to a court, at the time of action. By the time any challenge is heard, it may be too late for the bank in question." These are the problems that the Ciercos tried to address, but the federal court did not want to go beyond the narrow issue of the notices to consider FinCEN's conduct more broadly.
The Ciercos are considering an appeal of the ruling, but are focusing their efforts on redress in Andorra, where they have filed litigation and where the Constitutional court ruled last week that the Andorran government breached their rights when it failed to provide them with a critical report.
"This case is about transparency, accountability and making sure that valuable institutions cannot be expropriated because of arbitrary government action," said Higini Cierco. "The US Government has made BPA a victim to frighten the Andorrans and they have been frightened into a secret process that is attempting to destroy jobs, destroy value and undermines confidence in the rights of all Andorrans. We will fight on until we are vindicated."
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SOURCE Ramon and Higini Cierco